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Article published in March, 2013 Air Care Alliance Newsletter (Reproduced on right side of page >>>

AIR CARE 2013 - Albuquerque, NM
Saturday, April 27, 2013
- Will be discussing legal and regulatory issues with Melissa Rudinger, AOPA's Senior Vice President of Government
Affairs

LEGAL CORNER

By Jeffrey S. Kahn, Esq.

Director/Treasurer ACA

Many volunteer pilot organizations (VPOs) have been approached with offers of donated aircraft. The standard legal advice to the VPO has been: you can accept the donation, but sell the aircraft. A recent decision by the FAA reinforces that advice. For the donor who only receives a tax deduction for the actual sale price instead of the fair market value that the donor hoped to realize, it may cause him or her to reconsider the offer.

There is a limited exception involving travel incidental to one's business. For example, a VPO that arranges flights by volunteer pilots for charitable purposes may use the aircraft to bring its staff to Albuquerque for the Air Care Conference this April. However the exception does not apply if the organization's business is the carriage of passengers, as would be the case with an owned aircraft.

Patient Airlift Services, Inc. (PALS) knew all of this when considering what to do with a donated Beechcraft Bonanza. PALS was aware that, without an exemption from the FAA, it could not use the aircraft to conduct humanitarian flights with passengers. Having received an exemption to allow pilot fuel reimbursement (as have several other VPOs), PALS was hopeful that the FAA would grant an exemption to allow the use of the donated aircraft to better serve the public. PALS maintained that since the flights would meet the same high standards as flights conducted by the pilot in his or her aircraft, they posed no additional safety concerns.

In a decision issued January 23, 2013, the FAA denied the Petition. As always, the FAA praises, "[t]he humanitarian efforts of many individuals in the aviations community ..." Nonetheless, "... the FAA believes that the interests of safety are best served by requiring operations conducted for compensation or hire to be conducted under parts 121 or 135." There is nothing new in the decision. The FAA simply reiterates its very broad interpretation of "compensation", notes that flights conducted in an aircraft owned by a charity involve compensation, and concludes that it will not relax its standards because of the humanitarian nature of the flights.

Simply put, so long as VPOs are on safe ground only so long as they stay in the business of arranging and not providing air transportation.